No insurance company pays more commision to ulip products...traditional policies are given more commision. So the agent will surely promote traditional policies. its the customer who asks for ulip policies hoping to get more returns. also no insurance company charges 30% on 2nd yr. it was company like LIC which gave false promises to customers in their money plus policy and IRDA has warned them. also bajaj aliance was warned by irda last month to stop their ulip product for misseliing. so irda its doing its duty properly. U can easily pass competitive exams but its difficult to pass irda insurance agent exam. the pass percentage is only 10 to 20 % across india. so there is filtering in giving license to agents of all companies. Its the customers mistake of not reading the product details in the brouchure before signing up. When u invest your money its ur duty to go thru the details before investing.
RE:Facts should be known before commenting.
by Amitabh Akolkar on Sep 13, 2007 08:53 PM Permalink
if every customer was able to understand financial jargons then we would not need agents, would we? There has to be a difference between a guy selling "herbal" medicines on the street and the big insurance companies and their agents.
hey there mis-selling occurs only if the customer allows to!!!!!yes its a known fact and people tend to overlook this serious problem all the time.what should be known while buying a ulip is the overall charges that si the initial unit charges,fund management charges,premium allocation charges,accumulation unit charges and hell lot of other charges,hence when you buy a ulip say a lifelong plan the entire corpus is deducted by a sum of a whooping 24% and sometimes even more.however such a ulip will overtake a mutual fund over a period of atleast six years .hence if u want a short-term investment then plz go for a mf and take a pure term plan which is most advisable.the concept of mis-selling is at its worst in ICICI prudential !!!!!!!!hence dikhavon pe mat jao,sirf apni akal lagao!!!! and in doubt plz mail me!!!!!!!
This is a good article and a year back I was duped the same way by a Bajaj Allianz agent. This guy sold me the policy mentioning that you could stop paying the premium after 3 years, but when the policy arrived the it was a different story. The allocation charges are vey high and I dont think I will even recover the invested money over a period of 5 years.
RE:Good Article I was Cheated by an Agent Bajaj Allianz
by ash love on Sep 14, 2007 02:32 AM Permalink
1st thing Not all agents are bad like that agent. Some agents gives us very good plan like i got.
The agent from Bajaj Allianz ,
He has given me UNIT GAIN PREMIER PLAN, Its single premium policy, and its Allocation is : 105% and commision is only : 1%
Example: If you invest 100000 Rs. only 1 time, In ur account 1,05,000 rs. will be added,
RE:Good Article I was Cheated by an Agent Bajaj Allianz
by VAIBHAV SAMUDRA on Nov 26, 2007 02:25 AM Permalink
Some companies do come with innovative products, dont they? Is it still in the market? Can you invest now also, and is there a lock-in. Is withdrawal is possible? When? Are there any surrender charges if you surrender?
Your returns must be fabulus, I dont know how bajaj managed to pay agent also 1% ( how do you know that?) and also give allocation of 5%. I mean you say they acually paid 6% from their pocket, and gave you insurance cover and tax benefit too.
Are there any more charges and how are the returns.
Why IRDA cannot all this in the beginning. Do they know only to take INR 100 crores as deposit from Insurance companies? From every broker INR 1 crore. The initial period charges are eaten away by the Companies also, not only agents. When you make 40% per year growth, do you part with the agent? You should be smart while investing. In other business people are transperant on margins of profit? Every businessman is a cheater in this World, be it any line, any trade. Indian politicians are worst, without any investment they loot the Country.
dont you think over here something more is required?? dont you think an insurance agent is not a prudent option any more for going for an investment into insurance ?? dont you think a time has come to let INSURANCE BROKERS to get hold of the difficult job of managing the investment portfolio's of people looking for a good place to keep their money to grow??
i guess, its hightime that we start looking for somebody neutral ~ and not someone who's drugged by his/her principal to keep on uttering the products sold only by them ~
"f the premium allocation charge in the first year is 40%, what this means -- in simple English -- is that if you were to give Rs 100 as a premium only Rs 60 would be invested.
The 40% premium allocation charge would be used to pay a very high commission to the agent in the first year of the policy. Even during the second year of the policy the premium allocation charge can be as high as 30%."
My first question to you...
If you were running an Insurance company from where would you get funds to pay your employees and run the business???
and the second is...
Now since you have mentioned, please let me know an ULIP product in the market the charges 30% in the 2nd year...
And if at all there are products with hefty charges who tells you to buy them... Simply do not buy..
The thing is we can not blame others for our ignorance.
RE:Please go through you Basics before writing such Articles on mass media
by ash love on Sep 14, 2007 02:29 AM Permalink
Answer of ur 2nd question : let me know an ULIP product in the market the charges 30% in the 2nd year...
Answer: HDFC'S YOUNG STAR PLAN , 1st year allocation charge : 30% 2nd year allocation charge : 30%
so 2nd year charge is also 30% , so it is the worst in all ULIPS, this plan directly murder's the customer fund..
RE:RE:RE:Please go through you Basics before writing such Articles on mass media
by VAIBHAV SAMUDRA on Nov 26, 2007 01:43 AM Permalink
Again Do not attack on any any insurance company. Though I accept premium allocation charges are higher, there are some benefits too. - Lowest FMC of 0.8% - Just 20/- Per month admin charge, again lowest. - 0.1% bonus units in case of the PLUS policies, EVERY YEAR till the policy continues, you pay the premium or NOT. ( I dont know from where they fund it, but not paying premium is certainly not advisable. ) - 99% allocation in all years after you have paid charges. - Only three years locking again lowest as prescribled by IRDA in case you need money.
You will find similar things in other companies ULIPS.
All these things are given in POLICY DOCUMENT of every company. Pl go through them.
So these ULIP policies are suitable to people who can pay higher premiums. 99% allocation is not availble in MFs also, you pay 2.25% entry load is it ok to you?
Also, any companies child plans have one main benefit, after demise of the bread earner, childs future can be a big problem. Whatever money you get from Term plan, wont last for long, because, in most cases wife may be not aware of good investments. The policy takes care of that by NOT ONLY paying future premiums, but also by INVESTING them, rather than putting all money in Bank FD. Second thing is Child is not nominee, he/she is beneficiery. It does make huge diffrence. It saves the family from lenders etc. As this money is ONLY and ONLY for Child. ( It helps like Married woman property act or PPF helps,)
RE:RE:RE:RE:Please go through you Basics before writing such Articles on mass media
by VAIBHAV SAMUDRA on Nov 26, 2007 01:44 AM Permalink
I am not saying HDFC Yound star is BEST, I think they are justified in case of ICICI, HDFC, BAJAJ and others, as better products are not easily available, If you know pl let me know.
RE:Please go through you Basics before writing such Articles on mass media
by vinay Singh on Sep 13, 2007 06:46 PM Permalink
comparing the charges paying the empolyees, etc all these things are also done by the mutual fund industry which in currently being floating an idea of Zero - Entry load, then if ULIPs are said to be like mutual fund then why higher charges then std of 2.5% among mutual funds.
RE:Please go through you Basics before writing such Articles on mass media
by jervis pereira on Sep 14, 2007 10:30 AM Permalink
If that was the case where is the cost of your insurance cover. Its the key benefit. At as much as 30 times the value of your investment. eg. on 100/- you get as much as 3000/-INR life cover. Also fund management charges are allocated on MF not the only 2.25 entry load. The working of both companies systems are different.
RE:RE:Please go through you Basics before writing such Articles on mass media
by Parmod Kumar Sharma on Sep 18, 2007 08:34 AM Permalink
Dear, If you have ever read of a Ulip Document you should have known that ULIPS also charge fund management fees like MFs. Also insurance cover is not FREE GIFT. They charge insurance charges eg ICICI charges 3.5Rs per thousand per annum which is same as that of buyimg a term plan. So while buying ULIPS You pay to buy a term plan then fund management fees and Premium allocation charges. Then whatever is left is invested. Also MFs adjust their NAV for expenses and it shows in their returns whereas ULIPS cancel out units from your fund to recover their fund management charges and hence they can still pretend to give higher returns whereas actual returns are much less to investors as his units are less now. WHAT WILL YOU CALL THIS - PLAIN COLD BLOODED CHEATING !!!!!!!!!!. MFs are the best regulated products in INDIA.
RE:Please go through you Basics before writing such Articles on mass media
by VAIBHAV SAMUDRA on Nov 26, 2007 01:18 AM Permalink
Good analysis parmod, but one thing, As MFs adjust there FMC in NAV, I think ULIPS also do the same. They do DEDUCT Units for MORTALITY charge and ADMIN etc, but Fund Management charge is adjusted in NAV. It is always like that. Correct me incase I am wrong.
Second thing is, Either say insurance cover is not free so they charge you mortality charge equal to term plan chage. That is why your unit balance reduces, either you ask for insurance cover and pay for mortality charge, or take a term plan and MF. Dont expect Insurance company to give you insurance cover and not charge for it. I dont think that is possible with insurance company, though MF can give you if AMC comes with group insurance. ( Like DSP ML Mutual fund came 2-3 years back, I am not DSP ML agent)
RE:Please go through you Basics before writing such Articles on mass media
by fun stop on Sep 13, 2007 06:31 PM Permalink
hi Sameer,
I understand your point. But inactual the products are not pulled, they are pushed. In a customer base where hardly people have any knowledge of risk, insurance and their correct usage in their financial planning, it is the duty of the insurance company and the agents who sell the products explain the terms to the cutomer. In this purview, the agent is then first educated/trained and then given a certification that he can sell the service/insurance. Now it is the responsibility of the agent, as he is getting paid, to inform fully the upside and downside of the product and esp in case of insurance. So... who is to be blamed...
I guess mainly it is a nexus between the Agent and Officers of the Bank to dupe and encash on the ignorance of the customer. When you ask for a clarification they say you had 15 days of trial period and policy could have been cancelled. But by the time the customer realises that he has been taken for a ride, the agent would have recieved his commission and whould be never seen again. If you think the Bank would help, you would be foolish. they will only explain that you do not have to pay premium every year and you could withdraw your money minus the commission and other bank charges. nearly 40% of the premium is lost if you plan to foreclose the policy. Ing Vysya has taken us for a ride in Unit Linked Insurance Plans (Ulips) in the above manner. so now I weep not knowing who to turn to.
RE:Re: Ulips - I weep
by VAIBHAV SAMUDRA on Nov 26, 2007 01:51 AM Permalink
I think the same. and Pl. get yourself educated not only with ULIPS but also with other products like MFs and others, so no one will cheat you. Buy products from those agents whom you know and who are responsible.
I dont understand one thing, how come bank employees and stock broker employees allowed to distribute products, if they are not amfi / irda certified.
Also I do think this 15 days period is too less, because 90% well educated, internet savvy people are facing so much problems. May be lowest premium allocation charge ulips wil only help.
But I wil advice you to first understand your product from agent again, find out break even. and then decide your plan.
As per my knowledge in Reliance Life the Charges are depends on premium. for first year 10000 to 25000 -9.25% 25001 to 50000 -8.50% .50001 to 150000-7.75%.150001 to 15 lakh-7%. 1500001 to 25 lakh-6.25%. Rs 2500001 and above-- 4.75%. 2nd year onwards 5%. monthly charges Rs-40.00.FMC 1.50% PA. There other company also charging less charges. kindly don't come to conclusion that all companies are charging high. be specific.
RE:ulip charges
by RAVIRAJ DEB on Sep 13, 2007 06:38 PM Permalink
hey there mis-selling occurs only if the customer allows to!!!!!yes its a known fact and people tend to overlook this serious problem all the time.what should be known while buying a ulip is the overall charges that si the initial unit charges,fund management charges,premium allocation charges,accumulation unit charges and hell lot of other charges,hence when you buy a ulip say a lifelong plan the entire corpus is deducted by a sum of a whooping 24% and sometimes even more.however such a ulip will overtake a mutual fund over a period of atleast six years .hence if u want a short-term investment then plz go for a mf and take a pure term plan which is most advisable.the concept of mis-selling is at its worst in ICICI prudential !!!!!!!!hence dikhavon pe mat jao,sirf apni akal lagao!!!! and in doubt plz mail me!!!!!!!
RE:ulip charges
by S P on Sep 14, 2007 04:31 PM Permalink
If the invested money is going into a similar set of diversified funds, how is it that ULIPs are getting better returns than mutual funds?
RE:ulip charges
by VAIBHAV SAMUDRA on Nov 26, 2007 01:58 AM Permalink
Guys done blame a single company, mis-selling is sort of every where and IRDA is coming out with new guide lines every 2-3 years. As you said when buying a product APNI AKAL LAGAO. But pru ICICI and other all companies have some advantages. not all product are bad.
Second, ULIPs can be better over long term, assuming ULIP has given decent returns, and you are not in best performing MFs all the time, which is actually rarely possible, ULIP scores because of your long term horizon, and lower expences ( Yes, I mean lower expences in most cases, though not all) over long term. FMC etc are usually lower than expence ration in MF
I HAVE BEEN VICTIM OF AVIVA'S MISSELLING . AFTER THE SALE AGENT DIDNOT SHOW HIS FACE. PREMIUM CHEQUE IS ENCASHED BEFORE POLICY CONFIRMATION .TIME PERIOD WAS LESS POLICY CONFIRMATION WAS SENT ON 31 ST MARCH SO THAT YOU DONOT HAVE TIME IF YOU ARE TAKING TAX BENEFIT. FOREIGN COMPANIES ARE FOOLING AROUND INDIANS. even if you write to their ceo they won't listen
RE:misselling
by NareshKumar Madireddy on Sep 13, 2007 06:10 PM Permalink
Dont go for foreing companies, go back to our LIC, trusted for many years after all.
RE:misselling
by VAIBHAV SAMUDRA on Nov 26, 2007 02:07 AM Permalink
MK, Second thing, I think aviva life insu is a tie up in dabur and aviva, I am not 100% sure on this, so most probably aviva will have 26% in the company as per the IRDA act. ( not 100% sure again because of recent devolpments if any) So it seems you are not cheated by a foreign company, but INDIAN AGENT. dont blame for our mistake. Also, Pl do your tax planning in advance. Though Insurance offers tax benefits, it should not be only reason to buy a product. go to good Financial Planner get your finances in place.
We as customers have the full right to go through each and every terms and conditions of any product or contract we get into. If you plan your investments for tax savings at the nick of time as you think you very smartly did, then this is what happens.
I think its purely your mistake and you can not blame any one for your foolish decisions.
Govt gives entire 1 year to plan your taxes. But, smart people like you do it at the last moment and then blame the product companies for misselling.
I too am a customer and I have never had such exprience in the lasty 20 years. Only because I do things well before time.
RE:misselling
by shankar mahadevan on Sep 13, 2007 06:30 PM Permalink
you sound more like an insurance agent rather than a diligent customer. there is no taking away the fact that insurance companies mis-sell thier products.
RE:misselling
by S P on Sep 14, 2007 04:33 PM Permalink
I agree that many insurance agents mis-sell their products. However, he has a valid point. Investments should be done in a phased manner throughout the year and not run for cover at the end when you need to submit the document proofs.
